Cherise requested that I do a post on retirement. I fear that she will find this significantly lacking in useful information. Not because I don't know anything about what to do for retirement but because I don't agree with what I read. It's a personal thing. Most of the information out there is probably good but it has never resonated with me (add "resonated" to my list of overused words for this election - too many Ron Paul articles include "his message resonates with people" and as a coach, I read the word way too much).
With that disclaimer in place, let me describe my personal retirement plan at this point in my life. It could very well change in the future but this is what's going on right now.
First, I fully expect to work until I just can't work anymore. Until the Alzheimer's kicks in to the point where I just don't make sense any more (and doesn't continue to help in my humor posts), I'm going to be doing something that brings in money.
Not because I have to so that I'm surviving on cat food and crackers but because I think that human beings were built to serve a purpose. When people stop serving a purpose, they die quicker. Not that making money is necessarily a purpose but I have no dream of working hard until I'm 60 and then never working again. I fully expect to live to be at least 100 years old and I don't want to be bored during that time. I will probably be doing something that gives me an extremely flexible schedule and not necessarily be 40 hours a week so that I can spend time with kids and grandkids. I'll be doing something though. I may be a writer or speaker or something. After our next move, I'm thinking about going back to college to be Economist. It will be something that doesn't require too much physical strength and keeps my mind active.
That doesn't mean that I won't put something aside to help out. I don't want to be *forced* to work. I have read all about 401k and Roths and all that. I'm not a big fan. I have a 401k because my employer does a 50% match. You'd be crazy not to take advantage of a 401k if your employer does any sort of match. That's free money right there.
My beef with 401k's is that they say it's your money but you can't have it. You can borrow against it and pay it back with interest but you can't have it. That doesn't sound like it's my money.
Instead, I'm investing my money. If I ever want some back, I can sell off shares. The money is mine. Yeah, I had to pay taxes on it before I put it in but quite frankly, I'd rather pay taxes on it now while I have a full time job then pay taxes on it later when I might want the money to cover for a summer trip around the country. With the Internet being the beautiful thing that it is, you could sell off shares and put the money into your bank account from the laptop sitting on the table in your RV.
We also put money into Money Market Accounts but even at 5% interest, it probably won't outpace the inflation that the Fed is going to subject us to in the next year.
That brings up my next point. I'm 40 years old (for another 4 days) and I believe we have quite a wild ride ahead of us. What will the US be like in 25 or 30 years? It's impossible to know. Impossible even for a future oriented guy like me.
Technology is advancing at a pace that is absolutely amazing. The US is headed toward being a police state. The world is becoming smaller but the effects of Peak Oil will very likely reverse that process. We may travel to other countries by nuclear powered ships because air travel is too expensive. Who knows? So, quite frankly, I don't worry about too much past 5 years.
I always have a 5 year plan in place, never more. Any further than that is too hard to predict in our volatile world.
Last week, my wife mentioned that moving to Canada might be the right thing for us. Oddly enough, I was talking to a police sergeant here two days ago who is thinking about moving to Canada after he retires. If America doesn't change course quickly, people are going to leave. Wouldn't that be funny if Canada had to build a wall? The Mexico fence that some people advocate would be teeny compared to a Canadian wall.
I still advocate being debt free. That is the best way to prepare for retirement and a volatile economy. Don't promise your money away for the next 20 to 30 years. Pay off everything and live on cash. This makes you more financially adept at dealing with changes and it also means that you won't need as much money after you retire (unless the Fed has raised taxes to 95%).
We sent off the payoff amount for our van yesterday. That means that by tomorrow, our balance will be zero. We will owe $5,804.79 for my fuel efficient Saturn and we'll have a mortgage on a house that we are selling. When the house sells and the car is paid off, we will be free of financial obligations (except taxes - Go Ron Paul!). This will give us a great amount of flexibility.
For retirement, I would still advise that you buy a house because (hopefully) the taxes and insurance on a house in 25 years will be less than rent. We will buy a house where ever we end up (Minneapolis is a strong possibility right now for reasons I may go into in a different post) because I believe that people should own their home.
Cherise, I don't know if this has really been that much help. I hope it has but remember that this is just my plan. In summary:
- Pay off all debts
- Buy a house (as quickly as possible to reduce the amount of interest paid)
- Put money aside into something where you can get the money back
- Work toward a skill that is more mental than physical that can bring in money
- Vote for Ron Paul (he's the only person that can stop inflation)
I don't believe in suspending all of life's fun in order to have to a lazy retirement. I think that you have to find the balance between enjoying yourself in the present and preparing for the future.
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I wrote up a news article for thespoof.com for fun. Check it out and let me know what you think. Rate it while you're there. I get points for good ratings. I just joined so I have no idea what the points are good for but, and PTE Rick will agree with me on this, if there are points to be awarded, I want as many as I can get.